German chipmaker Dialog Semiconductor (DLGS.DE) has agreed to buy U.S. rival Atmel (ATML.O) for about $4.6 billion, adding to a wave of dealmaking in the sector.
Dialog said on Sunday Atmel shareholders would receive $4.65 in cash and 0.112 of a Dialog Semiconductor American Depository Share for each Atmel common share, equivalent to $10.42 per Atmel share based on Dialog's closing price as of Sept. 18.
On Friday, shares in Dialog closed at 45.325 euros apiece, while Atmel shares closed at $7.27.
Dialog said it planned to pay for the deal via cash, $2.1 billion of debt and about 49 million Dialog American Depository Shares. Following the transaction, Atmel shareholders will own about 38 percent of the combined group, Dialog said.
"By bringing together our technologies, world-class talent and broad distribution channels we will create a new, powerful force in the semiconductor space," Jalal Bagherli, Dialog's Chief Executive, said in a statement.
The transaction, expected to close during the first quarter of 2016, will boost Dialog's earnings in 2017, Dialog said, and result in annual cost savings of $150 million within two years.
Worldwide semiconductor mergers and acquisitions (M&A) reached $31 billion last year, the most since 2011, according to Thomson Reuters data. In the 12 months through March 2, 472 chip M&A deals were made worldwide, up from 383 in the previous year.
(Reporting by Christoph Steitz and Harro ten Wolde; Editing by Mark Potter)